8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
May 15, 2008

Wellman, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-10033
(Commission File Number) 04-1671740
(IRS Employer Identification
No.)

1041 521 Corporate Center Drive
Fort Mill, South Carolina
(Address of principal executive offices) 29707
(Zip Code)

Registrant’s telephone number, including area code: (803) 835-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1 - Press Release dated May 16, 2008.

EX-99.2 - Wellman Inc.'s Unaudited Monthly Operating Statements for the month ended April 30, 2008.

Item 1.01.  Entry into a Material Definitive Agreement.

     On May 15, 2008, Wellman Inc. (the “Company”) entered into a second letter agreement amending its senior secured superpriority debtor in possession credit agreement dated February 26, 2008 (the “Credit Agreement”) among the Company and certain of its domestic subsidiaries, as borrowers, Deutsche Bank Securities Inc., as sole lead arranger and bookrunner, Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, and the lenders that from time to time become party thereto. Under Section 9.1(i)(xvi) of the Credit Agreement as originally entered into, it would have been an event of default if the U.S. Bankruptcy Court (as defined below) did not enter an order in form and substance satisfactory to the administrative agent and the lenders, on or before May 22, 2008 (the “Order Deadline”), (A) approving bidding procedures, (B) scheduling a bidding deadline, auction date and sale hearing date, and (C) establishing procedures under Section 363 and 365 of the United States bankruptcy code for the sale of the Company. The letter agreement amended the Credit Agreement so that the Order Deadline is June 5, 2008. The letter agreement does not amend the other events of default. For a description of the Credit Agreement and a copy thereof please see the Company’s Current Report on Form 8-K dated February 26, 2008 filed with the Securities and Exchange Commission on March 4, 2008. A copy of the related press release is attached hereto as Exhibit 99.1 hereto.

Item 2.02.  Results of Operations and Financial Condition.

     The information set forth in Item 7.01 below is incorporated by reference in this Item 2.02 as if fully set forth herein.

Item 7.01. Regulation FD Disclosure.

     On May 19, 2008, Wellman, Inc. (the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) filed their unaudited consolidated Monthly Operating Statements for the month ended April 30, 2008 (the “Monthly Operating Statements”), with the United States Bankruptcy Court for the Southern District of New York (the “U.S. Bankruptcy Court”) in the matter of In re Wellman, Inc., et al., Case No. 08-10595 (SMB). Exhibit 99.2 to this Current Report on Form 8-K contains the unaudited consolidated Monthly Operating Statements as filed with the United States Bankruptcy Court.

     The Monthly Operating Statements are limited in scope, cover a limited time period, and have been prepared solely for the purpose of complying with the monthly

reporting requirements of the U.S. Bankruptcy Court. The financial information in the Monthly Operating Statements is in a format required by the U.S. Bankruptcy Court and the Company’s Debtor-in-Possession credit agreement, is preliminary and unaudited and does not purport to show the financial statements of any of the Debtors in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Therefore, the Monthly Operating Statements may exclude items required by GAAP, such as certain reclassifications, eliminations, accruals, valuations and disclosure items. The Company cautions readers not to place undue reliance upon the Monthly Operating Statements. There can be no assurance that such information is complete and the Monthly Operating Statements may be subject to revision. The Monthly Operating Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

     These Monthly Operating Statements have been derived from the books and records of the Company. They, however, have not been subjected to procedures that would typically be applied to financial information presented in accordance with GAAP and, upon the application of such procedures, the Company believes that they could be subject to changes, and these changes could be material. The information furnished in the Monthly Operating Statements includes certain normal recurring adjustments but may not include all of the adjustments that would typically be made for quarterly financial statements in accordance with GAAP. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

     Access to documents filed with the U.S. Bankruptcy Court and other general information about the Chapter 11 cases is available at www.kccllc.net/wellman. The content of the foregoing website is not a part of this Report.

Limitation on Incorporation by Reference

     The Monthly Operating Statements are being furnished for information purposes only and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”). Registration statements or other documents filed with the SEC shall not incorporate the Monthly Operating Statements or any other information set forth in this Report by reference, except as otherwise expressly stated in such filing. This Report will not be deemed an admission to the materiality of any information that is required to be disclosed solely by Regulation FD.

Forward-Looking Statements

     In addition to historical information, this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of

the Exchange Act. Words such as “believe,” “intend”, “expect,” “anticipate,” “plan,” “may,” “will,” and similar expressions are intended to identify forward-looking statements. Such statements include, among others, those concerning the Company’s expected financial performance, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These Statements are made as of the date of this Report based upon current expectations, and we undertake no obligation to update this information, whether as a result of new information, future developments or otherwise. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: our substantial liquidity needs and liquidity pressure; our substantial indebtedness and its impact on our financial health and operations; risks associated with our indebtedness containing floating interest rate provisions and its effect on our financial health if rates rise significantly; our ability to obtain additional financing in the future; risks associated with claims not discharged in the Chapter 11 cases and their effect on our results of operations and profitability; risks associated with the transfers of our equity, or issuances of equity in connection with our reorganization and our ability to utilize our federal income tax net operating loss carry-forwards in the future; our dependence on our management and employees; the adverse effect of competition on our performance; reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the financial condition of our customers; change in tax risks; environmental risks; natural disasters; regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock.

Item 8.01. Other Events.

     Pursuant to an order entered by the Bankruptcy Court on May 15, 2008, Wellman was authorized to retain and employ Conway, Del Genio, Gries & Co., LLC to perform restructuring management services for Wellman and to appoint Michael F. Gries as Chief Restructuring Officer, pursuant to an engagement letter dated March 12, 2008.

Item 9.01. Financial Statements and Exhibits.

     (a) Not applicable.

     (b) Not applicable.

     (c) Exhibits

99.1	Press Release dated May 16, 2008.
99.2	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended April 30, 2008.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	Wellman, Inc.
May 20, 2008	/s/ David R. Styka
	David R. Styka
	Vice President, Chief Accounting Officer and Controller

3

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release dated May 16, 2008.
99.2	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended April 30, 2008.

4

EX-99.1

Exhibit 99.1

Contact: Michael Bermish

Investor Relations Officer

(803) 835-2238

FOR IMMEDIATE RELEASE

WELLMAN, INC. RECEIVES AN ADDITIONAL EXTENSION
FOR APPROVAL OF BIDDING PROCEDURES

Fort Mill, SC., May 16, 2008 — Wellman, Inc. ([OTC]: WMANQ.OB) today announced that the lenders providing its Debtor in Possession (“DIP”) Financing have granted an additional one week extension of time so that the Company has until June 5, 2008 to have bidding procedures approved by the Bankruptcy Court. The Company, in consultation with its stakeholders, is continuing to evaluate offers and restructuring alternatives, including a plan of reorganization, in an effort to maximize the value of Wellman’s business on a going concern basis. In order to allow us to maximize value for all of our stakeholders, the DIP lenders have agreed to provide us additional time to continue discussions with interested parties. This does not extend the deadline to complete the sale.

Forward-Looking Statements

Statements contained in this release that are not historical facts, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “believes,” “expects,” “anticipates,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date hereof based upon current expectations, and we undertake no obligation to update this information. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the actions of our competitors; the financial condition of our customers; availability of financing, changes in financial markets, interest rates, credit ratings, changes in tax risks; inability to execute our strategy; environmental risks and foreign currency exchange rates; natural disasters, regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see our Form 10-K for the year ended December 31, 2007.

EX-99.2

Exhibit 99.2

Wellman, Inc.
Debtor-in-Possession
Analysis of Financial Statements for DIP Compliance
April 2008

An analysis of the April 2008 operating results of Wellman, Inc. and subsidiaries (also referred to as “Wellman”, “we”, “our” and “us”) are presented below. Wellman, Inc. and certain subsidiaries filed for bankruptcy protection under the provisions of Chapter 11 on
February 22, 2008. References to pre-petition and post-petition amounts are with respect to the February 22, 2008 filing date. In addition, reference to full year 2008 operating results reflects pre-petition and post-petition results.

Consolidated Statement of Operations

The $2.1 million decrease in gross profit (from $4.0 million in March to $1.9 million in April) was attributable to decreases in the chemical-based segment ($1.9 million) as well as the recycled-based segment ($0.2 million). The decrease in gross profit for the chemical-based segment was mainly attributable to decreased raw material margins, which is the difference between selling prices and raw material costs, as selling price increases were lower than raw material cost increases. Sales volume was flat in PET resin and down approximately 3 million pounds in polyester staple fiber in April. Gross profit for the recycled-based segment decreased, due primarily to lower raw material margins as declines in selling prices were greater than decreases in raw material costs. Other income of $0.2 million consisted of a gain on the sale of
non-operational assets in Johnsonville, SC. As a result of the above items, we reported an operating loss of $0.7 million in April, compared to operating income of $1.3 million in March. Interest expense remained flat at $0.9 million in April. Interest expense was calculated only on the amount borrowed under our Debtor-in-Possession Credit Agreement (the “DIP Facility”). Reorganization costs, which consisted primarily of legal fees related to the Chapter 11 filing, were $3.1 million in April, compared to $2.8 million in March. As a result, our net loss was $4.7 million for April 2008.

Consolidated Balance Sheet

The balance sheet at April 30, 2008, reflected $142.2 million in borrowings under the DIP Facility and $0.3 million in cash and cash equivalents. The total borrowed, net of cash on hand, was $19.3 million higher than March. Accounts receivable and inventories increased by $14.6 million and $8.0 million, respectively, due to increased selling prices, higher raw material costs and increased raw material inventory pounds in the chemical-based segment. Prepaid expenses and other current assets and accounts payable decreased by $8.6 million and $3.4 million, respectively.

Consolidated Statement of Cash Flows

We borrowed an additional $18.2 million in April to fund our operations and pay reorganization costs of $3.1 million. The additional funding for operations was primarily attributable to increases in working capital.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	April			March
	2008			2008
Net Sales	$	85.1		$	86.6
Cost of Sales		83.2			82.6
Gross Profit (Loss)		1.9			4.0
Selling, General and Administrative Expenses		2.8			2.7
Other (Income) Loss		(0.2	)		0.0
Operating Income (Loss)		(0.7	)		1.3
Interest Expense, Net*		0.9			0.9
Earnings (Loss) from Continuing Operations Before Reorganization Items and Income Taxes		(1.6	)		0.4
Reorganization Items, Net		3.1			2.8
Earnings (Loss) from Continuing Operations Before Income Taxes		(4.7	)		(2.4	)
Income Tax Expense (Benefit)		0.0			0.0
Earnings (Loss) from Continuing Operations		(4.7	)		(2.4	)
Earnings (Loss) from Discontinued Operations, Net of Tax		0.0			0.0
Net Earnings (Loss)	$	(4.7	)	$	(2.4	)

* - Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the compromised debt, per the debt agreements, was $3.4 for March and $3.5 for April. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	For the Month Ended						For the Year-to-Date
	April						Period Ended April
	2008			2007			2008			2007
Net Sales	$	85.1		$	97.5		$	325.1		$	416.7
Cost of Sales		83.2			93.8			318.9			409.9
Gross Profit (Loss)		1.9			3.7			6.2			6.8
Selling, General and Administrative Expenses		2.8			3.5			12.4			15.3
Other (Income) Loss		(0.2	)		(2.1	)		(0.0	)		(1.9	)
Operating Income (Loss)		(0.7	)		2.3			(6.2	)		(6.6	)
Interest Expense, Net*		0.9			5.2			12.0			20.4
Earnings (Loss) from Continuing Operations Before Reorganization Items and Income Taxes		(1.6	)		(2.9	)		(18.2	)		(27.0	)
Reorganization Items, Net		3.1			0.0			9.2			0.0
Earnings (Loss) from Continuing Operations Before Income Taxes		(4.7	)		(2.9	)		(27.4	)		(27.0	)
Income Tax Expense (Benefit)		0.0			0.0			0.0			0.0
Earnings (Loss) from Continuing Operations		(4.7	)		(2.9	)		(27.4	)		(27.0	)
Earnings (Loss) from Discontinued Operations, Net of Tax		0.0			(0.1	)		0.0			(0.4	)
Net Earnings (Loss)	$	(4.7	)	$	(3.0	)	$	(27.4	)	$	(27.4	)

* - Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the compromised debt, per the debt agreements, was $3.5 for the month of April and $7.7 year-to-date after Feb 22, 2008. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	April 30,			March 31,
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	0.3		$	1.3
Accounts receivable		149.9			135.3
Inventories		93.2			85.2
Prepaid expenses and other current assets		30.8			39.4
Current assets held for sale		—			—
Total current assets		274.2			261.2
Property, plant and equipment:
Land, buildings and improvements		90.4			90.5
Machinery and equipment		340.1			336.9
CIP		4.4			6.3
		434.9			433.7
Less accumulated depreciation		196.0			193.9
Net property, plant and equipment		238.9			239.8
Other assets		10.9			10.7
Noncurrent assets held for sale		—			0
Total Assets	$	524.0		$	511.7
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade	$	4.4		$	7.8
Accrued liabilities		20.7			18.1
Debtor in possession credit agreement		142.2			123.9
Other debt		—			—
Current liabilities associated with assets held for sale		—			—
Total current liabilities		167.3			149.9
Liabilities subject to compromise		531.2			531.1
Long-term debt		—			—
Deferred income taxes and other noncurrent liabilities		37.1			37.8
Noncurrent liabilities associated with assets held for sale		—			—
Total Liabilities		735.6			718.8
Stockholders’ Deficit:
Common stock		—			—
Preferred stock		185.7			185.7
Paid-in capital		248.7			248.5
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			—
Accumulated deficit		(601.4	)		(596.7	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(211.6	)		(207.1	)
	$	524.0		$	511.7

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	April 30,			April 30,
	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	0.3		$	1.8
Accounts receivable		149.9			166.1
Inventories		93.2			95.7
Prepaid expenses and other current assets		30.8			32.2
Current assets held for sale		—			59.9
Total current assets		274.2			355.7
Property, plant and equipment:
Land, buildings and improvements		90.4			83.8
Machinery and equipment		340.1			950.8
CIP		4.4			10.8
		434.9			1,045.5
Less accumulated depreciation		196.0			500.2
Net property, plant and equipment		238.9			545.3
Other assets		10.9			50.7
Noncurrent assets held for sale		—			32.1
Total Assets	$	524.0		$	983.8
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade	$	4.4		$	65.0
Accrued liabilities		20.7			30.8
Debtor in possession credit agreement		142.2			—
Other debt		—			0.3
Current liabilities associated with assets held for sale		—			22.0
Total current liabilities		167.3			118.1
Liabilities subject to compromise		531.2			—
Long-term debt		—			601.1
Deferred income taxes and other noncurrent liabilities		37.1			72.7
Noncurrent liabilities associated with assets held for sale		—			12.5
Total Liabilities		735.6			804.4
Stockholders’ Deficit:
Common stock		—			0.0
Preferred stock		185.7			172.8
Paid-in capital		248.7			247.3
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			29.6
Accumulated deficit		(601.4	)		(225.9	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(211.6	)		179.3
	$	524.0		$	983.8

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
(in millions)

	April			March
	2008			2008
Cash flow from operating activities:
Net earnings (loss)	$	(4.7	)	$	(2.4	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.0
Depreciation		1.2			1.0
Amortization		1.4			1.4
Amortization in interest expense		0.3			0.0
Deferred taxes on income		0.0			0.0
Reorganization Items		3.1			2.8
Payment of reorganization items		(3.1	)		(2.8	)
Gain on sale of assets		(0.2	)		0.0
Changes in assets and liabilities:
Accounts receivable		(14.6	)		(4.7	)
Inventories		(8.0	)		6.0
Prepaid expenses and other current assets		7.0			(1.1	)
Other assets		(0.2	)		(0.2	)
Accounts payable and accrued liabilities		(0.8	)		(0.5	)
Other liabilities		(0.7	)		(0.3	)
Other		0.2			0.0
Net cash provided (used) by operating activities		(19.1	)		(0.8	)
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.4	)		(0.4	)
Proceeds from sale of assets		0.3			0.0
Net cash used by investing activities		(0.1	)		(0.4	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		18.2			(0.6	)
Dividends paid on common stock		0.0			0.0
Debt and equity issuance costs		0.0			0.0
Net cash provided (used) by financing activities		18.2			(0.6	)
Discontinued Operations:
Operating activities		0.0			0.0
Investing activities		0.0			0.0
Financing activities		0.0			0.0
Net cash provided (used) by discontinued operations		0.0			0.0
Increase (decrease) in cash and cash equivalents		(1.0	)		(1.8	)
Cash and cash equivalents at beginning of period		1.3			3.1
Cash and cash equivalents at end of period	$	0.3		$	1.3

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
April Fiscal Period
(in millions)

	For the Month						For the YTD Period
	Ended April						Ended April
	2008			2007			2008			2007
Cash flow from operating activities:
Net earnings (loss)	$	(4.7	)	$	(3.0	)	$	(27.4	)	$	(27.4	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.1			0.0			0.4
Depreciation		1.2			3.4			4.3			15.1
Amortization		1.4			1.4			5.7			5.5
Amortization in interest expense		0.3			0.4			0.9			1.4
Deferred taxes on income		0.0			(0.0	)		0.0			(0.1	)
Johnsonville fibers disposal costs		0.0			0.0			0.0			(1.0	)
Payments made against Jville fiber disposal costs		0.0			0.0			0.0			(2.2	)
Reorganization Items		3.1			0.0			9.2			0.0
Payment of reorganization items		(3.1	)		0.0			(9.2	)		0.0
Gain on sale of assets		(0.2	)		0.0			(0.2	)		0.0
Changes in assets and liabilities:
Accounts receivable		(14.6	)		3.5			(20.9	)		(4.7	)
Inventories		(8.0	)		3.8			3.8			18.6
Prepaid expenses and other current assets		7.0			2.1			(7.7	)		2.4
Other assets		(0.2	)		(0.0	)		(0.5	)		(0.0	)
Accounts payable and accrued liabilities		(0.8	)		(23.2	)		12.5			(16.3	)
Other liabilities		(0.7	)		(0.8	)		(2.0	)		(1.7	)
Other		0.2			(0.7	)		0.1			(0.5	)
Net cash provided (used) by operating activities		(19.1	)		(13.0	)		(31.4	)		(10.5	)
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.4	)		(0.9	)		(1.5	)		(3.2	)
Proceeds from sale of assets		0.3			0.0			0.3			0.0
Net cash used by investing activities		(0.1	)		(0.9	)		(1.2	)		(3.2	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		18.2			20.5			37.0			24.4
Dividends paid on common stock		0.0			0.0			0.0			(0.7	)
Debt and equity issuance costs		0.0			0.0			(4.1	)		0.0
Net cash provided (used) by financing activities		18.2			20.5			32.9			23.7
Discontinued Operations:
Operating activities		0.0			(4.8	)		0.0			(5.9	)
Investing activities		0.0			(0.1	)		0.0			(0.7	)
Financing activities		0.0			0.1			0.0			(1.6	)
Net cash provided (used) by discontinued operations		0.0			(4.8	)		0.0			(8.2	)
Increase (decrease) in cash and cash equivalents		(1.0	)		1.8			0.3			1.8
Cash and cash equivalents at beginning of period		1.3			0.0			0.0			0.0
Cash and cash equivalents at end of period	$	0.3		$	1.8		$	0.3		$	1.8

Wellman, Inc.
EBITDAR, as defined

We have provided a non-GAAP measure, “EBITDAR, as defined,” because our DIP Credit Agreement uses this measurement as a key component. In accordance with our DIP Credit Agreement, we must maintain a minimum cumulative EBITDAR (cumulative monthly commencing March 1, 2008, and rolling into trailing twelve months) tested as of the last day of the applicable month, with a report due on the fifteenth day after the end of each month, commencing with the first full month following the Petition Date. We believe it is also an important measurement tool for (1) financial institutions that provide us with capital; (2) investors; and (3) our Board and management. In each instance, we used EBITDAR, as defined because it excluded items that are not expected to impact the long- term cash flow of the businesses and are not an indication of our ongoing operating performance. In addition, EBITDAR, as defined is a measure frequently used to value an enterprise and to enable investors to analyze the efficiency of our operations and to compare and/or rank use with other companies of differing capital structures. Our Board of Directors, CEO (our chief operating decision maker), and our senior management use EBITDAR, as defined to evaluate the operating performance of our segments and determine incentive compensation for employees throughout the organization. EBITDAR, as defined, under the DIP Credit Agreement is calculated by adding Earnings (loss) from continuing operations, income tax expense (benefit), interest expense, non-cash charges and non-recurring fees, cash charges, and other cash expenses made or incurred in connection with entering into the DIP Credit Agreement.

     The following table reconciles Loss from continuing operations to EBITDAR, as defined for each month and the four months ending April 30, 2008.

													Year-to-
	January			February			March			April			Date
	2008			2008			2008			2008			April 2008
Loss from Continuing Operations	$	(5,038	)	$	(15,276	)	$	(2,388	)	$	(4,670	)	$	(27,371	)
Income Tax Expense (Benefit)		—			—			—			—			—
Interest Expense, Net		4,675			5,505			925			903			12,008
Depreciation & Amortization		2,530			2,441			2,493			2,615			10,079
Permitted Adjustments:
Reorganization Items		—			3,349			2,798			3,098			9,245
Inventory Reserves		310			802			27			1,130			2,269
Uncollectible Accounts		144			—			65			—			209
Hurricane Katrina Costs		—			63			—			—			63
Sale of Jville Assets		—			—			48			(232	)		(184	)
Total permitted adjustments		454			4,214			2,938			3,996			11,602
EBITDAR, as defined	$	2,621		$	(3,116	)	$	3,968		$	2,844		$	6,318

     Despite the importance of EBITDAR, as defined, we recognize that this non-GAAP financial measure does not replace the presentation of our GAAP financial results and are not intended to represent cash flows or an alternative to net earnings (loss). The EBITDAR, as defined inforamtion we provide is simply supplemental information and an additional measurement tool to assist our management and certain investors in analyzing our performance.

In re Wellman, Inc., et al.
Case No. 08-10595 (SMB)
Reporting Period: April 1 — April 30, 2008
Cash Disbursements by Petitioning Entity

			April 1 - April 30,
Petitioning Entities	Case Number:		2008
Wellman, Inc.		081-08-10595	$	89,753,971
Fiber Industries, Inc.		081-08-10607		—
Wellman of Mississippi, Inc.		081-08-10605		—
PTA Resources LLC		081-08-10596		—
Prince, Inc.		081-08-10604		252
ALG, Inc.		081-08-10599		211
Wellman Fibres Ltd.		081-08-10598		—
MRF, Inc.		081-08-10600		—
Warehouse Associates Inc.		081-08-10601		—
MED Resins, Inc.		081-08-10602		—
Carpet Recycling of Georgia Inc.		081-08-10603		—
Josdav, Inc.		081-08-10606		—
			$	89,754,434